How to Find the Lowest Car Insurance Rates for Your Situation

The fastest way to lower your rate is to get quotes from at least three insurers

Car insurance prices vary widely between companies for the same driver and car — sometimes by hundreds of dollars a year. The only way to know what you will actually pay is to request quotes from multiple insurers and compare them side by side. Most insurers let you get a quote online in 10 to 15 minutes without committing to anything.

Start with the insurers you have heard of — State Farm, Geico, Progressive, Allstate, USAA (if you are military or a veteran), and your current insurer if you have one. Then add one or two regional carriers that operate in your state, because they sometimes undercut the national brands. Your state's insurance commissioner's office publishes a list of all licensed insurers in your state; you can search that list online.

When you request quotes, use the same coverage limits and deductibles for each one. If you change the deductible between quotes, you will not be comparing the same thing. Once you have three to five quotes in front of you, the lowest price becomes obvious.

Key Takeaways

• Getting quotes from at least three different insurers is the only reliable way to find the lowest rate, because prices vary dramatically for identical coverage.
• Your age, driving record, location, and the car you drive are the biggest factors in what you pay, and you cannot change most of them.
• Bundling home and auto insurance with the same company often saves 15 to 25 percent on your auto premium, though you should still compare bundled quotes against standalone quotes.
• Raising your deductible from $500 to $1,000 typically lowers your premium by 10 to 15 percent, but only do this if you can afford to pay that amount out of pocket after an accident.
• Discounts for good driving records, safety features, and paid-in-full policies exist at most insurers, but they rarely add up to more than 20 percent off your base rate.

What actually determines your car insurance price

Before you start comparing quotes, understand that certain factors are baked into every quote you receive. Your age, driving history, location, and the specific car you drive are the four biggest price drivers. You cannot change these things to get a lower quote — they are what they are.

A 25-year-old with a clean driving record in a rural area will pay less than a 19-year-old with a speeding ticket in a city. A Honda Civic costs less to insure than a Porsche 911. These differences are not negotiable. What you can control is the coverage level, the deductible, and which company you choose.

Insurers also use credit-based insurance scores in most states — a number derived from your credit report that predicts how likely you are to file a claim. This score is separate from your credit score. You cannot see it or change it quickly, but it affects your quote at every company.

How bundling home and auto insurance can lower your rate

If you own a home or rent and have renters insurance, bundling your auto policy with the same insurer usually saves you money on both. Most insurers offer a discount of 15 to 25 percent on your auto premium when you bundle, though the exact amount varies by company and state.

The catch is that the bundled rate is only a good deal if the total cost of both policies is lower than buying them separately. Get a bundled quote from one company, then get separate quotes for auto and home from a different company. Compare the total cost, not just the auto portion. Sometimes the company with the lowest auto rate does not have the lowest home rate, and vice versa.

Raising your deductible to reduce your premium

Your deductible is the amount you pay out of pocket before insurance kicks in after an accident or claim. A higher deductible means a lower monthly or annual premium. The trade-off is that you have to be able to afford that deductible if something happens.

Moving from a $500 deductible to a $1,000 deductible typically saves 10 to 15 percent on your collision and comprehensive coverage. A $2,500 deductible saves even more, but only choose this if you have that amount in savings and can access it quickly. If you cannot afford the deductible, a claim will leave you unable to pay, and you will end up in debt anyway.

Discounts that actually reduce your rate

Most insurers offer discounts for a clean driving record (usually three to five years without accidents or violations), safety features on your car (airbags, anti-theft devices, automatic braking), and paying your premium in full rather than monthly. Some offer discounts for completing a defensive driving course or for low annual mileage.

These discounts rarely stack to more than 20 percent off your base rate. A company advertising a 30 percent discount is usually showing you the maximum possible discount if you may have access to for every single one — most people do not. When you get a quote, the discounts you actually may have access to for are already included in the number shown to you. Do not expect additional savings on top of the quoted price.

Why your current insurer might not be the cheapest

Many people stay with their current insurer because they assume switching is complicated or because they have been with the company for years. In reality, switching takes about 30 minutes and can save you hundreds of dollars annually. Insurers do not reward loyalty with lower rates — they reward new customers with introductory discounts.

If you have been with the same company for more than two years, get quotes from competitors. You will often find that a new insurer charges less than what you are currently paying, even for the same coverage. If you find a cheaper option, contact your current insurer and ask if they will match it. Some will; many will not. If they do not, switch.

Comparing quotes side by side

When you have three to five quotes, create a straightforward table with the insurer name, the monthly or annual premium, the deductible, and the coverage limits. Line them up so you can see the differences at a glance. The cheapest option is not always the best — also consider the insurer's customer service reputation and claims process, which you can research through online reviews and your state's insurance commissioner's complaint database.

Some insurers are cheaper but have slower claims processing or harder-to-reach customer service. Others cost a bit more but handle claims quickly. The difference in price between the cheapest and the third-cheapest quote is often small enough that better service is worth the extra cost. Read a few recent reviews before you decide.

Frequently Asked Questions

Does shopping around for quotes hurt my credit score?

No. When you request an insurance quote, the insurer performs a soft credit inquiry, which does not affect your credit score. Hard inquiries — the kind that lower your score — only happen if you actually explore for credit like a loan or credit card. You can get as many insurance quotes as you want without any impact on your credit.

How often should I get new quotes?

Get quotes once a year, or whenever something changes — a move, a new car, a major life event, or a change in your driving record. Rates change constantly, and a company that was cheapest last year might not be this year. Annual shopping takes 30 minutes and often saves you money.

Will my rate go down if I take a defensive driving course?

Some insurers offer a small discount — usually 5 to 10 percent — if you complete an approved defensive driving course. The discount varies by company and state. Check with your insurer before you take the course to confirm they offer the discount and what the course must cover. The savings rarely exceed the cost of the course, so do it only if your insurer confirms the discount first.

What if I have a bad driving record?

You will pay more, but you can still find the lowest rate by getting multiple quotes. Some insurers specialize in drivers with accidents or violations and charge less than the major brands. Your state may also have an insurer of last resort — a company that must write policies for drivers other insurers reject. Rates are higher, but it is an option if you cannot find coverage elsewhere.

Can I negotiate my car insurance rate?

Rates are set by formula — your age, location, driving record, car, and coverage choices go into a computer, and a price comes out. You cannot negotiate that price. What you can do is change the variables: raise your deductible, lower your coverage limits, or switch to a cheaper company. The quote itself is not negotiable, but your options are.